The Sofa Workshop Limited launched 'passing off' proceedings against Sofaworks Limited. Passing off is the legal term for when a business trades on the goodwill of another by using a name or trading style similar enough to the other firm that the average person might be unaware that it is a different business.

In upholding the claim, the Court found that a significant proportion of consumers were likely to be confused by the similarity of the two names and might believe that the companies were in some way economically linked. Sofa Workshop had suffered material damage to its goodwill as a result.

Sofa Workshop had also claimed that Sofaworks had infringed its Community Trade Marks (CTMs), but this claim was rejected on the basis that the marks were invalid. That was because they had in some respects not been used and because the company only had a modest trading presence in European countries other than the UK. For a CTM to be accepted as valid, there must normally be substantial use in more than one member state of the EU.

Validity of a CTM can also be established on the basis of 'acquired distinctiveness' where the trade mark can be demonstrated to have a distinct identity in several different EU countries.